A Louisiana doctor filed a whistleblower lawsuit against Pfizer claiming the pharmaceutical company was overcharging Medicaid for a heartburn medication called Protonix. According to FiercePharma, Pfizer agreed to settle the Medicaid fraud claim and will pay $784 million.
This significant sum, which was improperly paid to Pfizer, will be returned to taxpayers thanks to the doctor who stepped forward and filed a qui tam lawsuit.
Qui tam lawsuits encourage whistleblowers to file litigation if they suspect fraud against the government. Under the False Claims Act, which makes qui tam lawsuits possible, whistleblowers are rewarded for speaking out. They get to keep part of the money the government is able to recover through settlements or court verdicts. The doctor who filed the lawsuit in this case will collect $59 million.
Whistleblower Reaps Rewards for Bringing Fraud to Light
Pfizer in 2009 acquired a company called Wyeth, which was the actual maker of the Protonix heartburn medication. The acquisition effectively made Pfizer responsible for paying the settlement. Wyeth reportedly gave rebates and discounts to private payers but allegedly failed to provide the same price discounts to Medicaid programs as required by law. Wyeth allegedly overcharged the government for its heartburn medication between 2001 and 2006.
Medicaid, a government program that provides health insurance coverage for low income individuals, is perpetually under financial strain. The program cannot afford to be overcharged for medications, or to pay higher prices for drugs than private insurers. Wyeth wasted taxpayer money by allegedly failing to offer the required discounts, forcing the government to overpay. Fortunately, the actions of the Louisiana doctor have allowed for recovery of some of the misspent money. This means more Medicaid funds are put back into the coffers to provide help to those who need it.
The doctor who filed the qui tam lawsuit against Pfizer has shed light on other past instances of alleged fraud. For example, in an earlier lawsuit against Merck related to its heartburn medication Pepcid, the doctor received $38 million. Accusations against Merck included improperly offering hospitals a better deal to prescribe Pepcid than they were offering to Medicaid.
The FiercePharma article reports on the controversial element of whistleblowers recovering large sums, especially when there are "serial whistleblowers" bringing multiple suits. But the fact is the government does not have the resources to investigate every claim made or every possible instance of fraud.
Without incentives for whistleblowers, people might turn a blind eye to wrongdoing because filing suit can present professional risk. Whistleblowers who help the government recover millions of dollars drug companies improperly drain from health insurance programs to help the poor deserve to be richly rewarded for their efforts.